powi investor-presentation-2015-02 v001-l1knq4

Power Integrations, Inc. Nasdaq: POWI

February 2015

Forward-Looking Statements/Non-GAAP Metrics

These slides accompany an oral presentation by Power Integrations, Inc., which contains forward-looking statements. Each statement relating to events that will or may occur in the future is a forward-looking statement. The Company’s actual results may differ materially from those suggested in the presentation. Information concerning factors that could cause such a difference is contained in the Company’s most recent reports on Form 10-K and 10-Q.

This presentation may also contain certain non-GAAP financial information. Reconciliations of non-GAAP financial metrics to GAAP results are available at the end of this presentation and/or on the investor page of the Power Integrations website, http://investors.power.com (see “Historical Financials” data file).

©2015 Power Integrations | www.power.com 2

http://investors.powerint.com/

Secular Growth Story in Analog Semis

Leader in energy-efficient high-voltage power conversion

Clean-tech enabler: efficient appliances, LED lighting, DC motor drives, renewable energy, electric transportation

Expanding market opportunity with higher-power products, rapid-charging for mobile devices

Double-digit revenue CAGR since 2001


Comprehensive Expertise in High-Voltage

Systems & Applications Know-How

Integrated Process

Technology

High- Voltage

Technology


Ultra-simple power converters Fewer components

Shorter design cycles

Easier to manufacture

Higher reliability

BOM cost similar to discrete

designs

Highly energy-efficient

Power Package

Innovations

Discrete power supply: 70 components

Equivalent power supply with POWI: 36 components, smaller board

Linear transformer: weighs 12 oz.

Adapter with POWI: weighs 2 oz.

Highly Integrated Power Converters Replacing Legacy Technologies


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U.S

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ate

nts

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Relentless Innovation

677 U.S. Patents at 12/31/2014


Vast Addressable Market – Power Conversion Is Needed Everywhere


Long-Term Secular Growth Drivers

Ongoing transition to IC-based power supplies Integration saves labor and materials, improves reliability


Leading Transition to IC-Based Power Supplies

Linear Transformers

1970 1994

Discretes

1994 Today 1970

Integrated POWI

• iWatt/Dialog

• BCD/Diodes

• Active

• Leadtrend

• OnBright

• Fairchild

• Infineon

• ON Semi

• ST Micro

• NXP

Po

we

r Su

pp

ly U

nit

Vo

lum

e

Fairchild

Sanken

ST Micro

ON Semi

Infineon


InnoSwitch™: A New Level of Integration

First IC to integrate primary and

secondary sides of power supply

across safety barrier

Enables drastic reduction in

component count, complexity

Highly energy-efficient


Secondary Primary



Energy-efficient electronics & appliances Driven by standards and consumer awareness


Recognized Leader in Clean Technology

Member of clean-tech stock indices The Cleantech Index (CTIUS)

Nasdaq Clean Edge Green Energy (CELS)

Ardour Global Index (AGIGL)

Twice named a top 20 sustainable stock

by SustainableBusiness.com

ENERGY STAR® award recipient

Star of Energy Efficiency award recipient


Energy Specs Continue to Tighten

U.S. Dept. of Energy tightening federal standards for external power supplies

ENERGY STAR® “Most Efficient” label rewards top performers

SEAD competition to recognize most efficient TVs

European standby power limitation tightened to 0.5 W in 2013

Traditional 40 W and 60 W bulbs banned in U.S.


“Zero” Series Zeroes Out Standby Waste

CAPZero™ eliminates waste from

X-cap bleed resistors

SENZero™ disconnects sense

resistors in main power supply

LinkZero™ cuts waste to 0.00 W in

chargers and auxiliary power

supplies


Energy Vampire vs. LinkZero™





LED lighting Requires low-cost, efficient, reliable power supplies


Well-Positioned in LED Lighting

Traditional bulbs phasing out

LEDs need efficient, reliable drivers

Integration brings reliability, efficiency,

size advantage

LYTSwitch™ products offer highest level of

integration available





LED lighting Requires low-cost, efficient, reliable power supplies

Expanding market opportunity Rapid charging for mobile-device market

Higher-power products add ~$1B to addressable market


Rapid Charging: Emerging Trend in Mobility

Larger batteries causing extended downtime for charging

Qualcomm Quick Charge 2.0 cuts charge time up to 75%

Requires greater integration and efficiency vs. standard

chargers; higher dollar content

Conventional Charging

Quick Charge 2.0

Quick Charge 2.0 PMIC

InnoSwitch™ + ChiPhy™

Interface Chip


http://www.google.com/url?sa=i&rct=j&q=clock+face&source=images&cd=&cad=rja&docid=CqMI23ExZc4XhM&tbnid=EO3viT6L0KIQTM:&ved=0CAUQjRw&url=http://images.devilfinder.com/go.php?q=The+Clock+face+&ei=aUVJUbCLBoe_igL_sICoBQ&bvm=bv.44011176,d.cGE&psig=AFQjCNFQp6HDpu_TutNG3tAtEw7nF3FSIw&ust=1363842722770627

http://www.google.com/url?sa=i&rct=j&q=clock+face&source=images&cd=&cad=rja&docid=CqMI23ExZc4XhM&tbnid=EO3viT6L0KIQTM:&ved=0CAUQjRw&url=http://images.devilfinder.com/go.php?q=The+Clock+face+&ei=aUVJUbCLBoe_igL_sICoBQ&bvm=bv.44011176,d.cGE&psig=AFQjCNFQp6HDpu_TutNG3tAtEw7nF3FSIw&ust=1363842722770627

Expanding Reach to Higher Power Levels

0W 500W 5W 50W 2W 20W 200W

CAPZero™/SENZero™/Qspeed™

Hiper™ Family

TOPSwitch™

TinySwitch™

LinkSwitch™ / InnoSwitch™

LYTSwitch™ LED Products


Radically Simplifying Power Supplies for PCs, TVs

HiperPFS™ and HiperTFS™ replace up to 100 components

HiperTFS + HiperPFS


More Silicon Content at Higher Power Levels EMI Filter PFC Stage Main and Standby Stage

Main &

Standby

Controller

Boost Inductor

PFC

Controller

EMI Filter

Standby

Output

AC

Gate

Drive

SR

Main

Output

TNY

Before: Single IC for standby power supply


More Silicon Content at Higher Power Levels EMI Filter PFC Stage Main and Standby Stage

Main &

Standby

Controller

Boost Inductor

PFC

Controller

EMI Filter

Standby

Output

AC

HiperPFS

HiperTFS

CpZ

Gate

Drive

SnZ

QSpeed

SR

Main

Output

HiperTFS™ main + standby CapZero™ HiperPFS™ SenZero™ Qspeed™

Now: Up to five components, potential dollar content >5x higher


Acquisition Extends Power Range Further

Acquired CT-Concept in 2012

IGBT drivers for industrial

motors, renewable energy,

locomotives, DC transmission

Addressable market ~$500M;

now >10% of POWI revenue

Broadens POWI opportunity in

clean-power applications

SCALE™ drivers reduce component count, enhance efficiency, reliability


Spanning the Clean-Power Ecosystem Energy Ecosystem

Energy

Generation

Energy Transmission

Energy Consumption

Wind Turbines Solar Power

HVDC Transmission

Motor Control Hybrid Vehicles

Locomotive Medical

End Markets

Power Semiconductors

IGBT module: Transistors arranged in parallel to increase switching capacity at very high

currents and high voltages

Driver optimizes efficiency, operating

performance and lifespan of the IGBT module

IGBT Module

Driver


Higher-Power Products Expand SAM to $2.5B

Consumer

Comms Computer

Industrial

Mid-power applications in orange High-power applications in green

● Desktop/server standby

● Desktop main

● Notebook adapters

● LCD monitors

● Printers

● LED general lighting

● LED street lights

● Smart meters

● Industrial control

● UPS

● Industrial motor drives

● Wind/solar inverters

● Electric trains/cars

● DC transmission

● White goods

● Air conditioners

● TV standby / TV main

● Small appliances

● Set-top boxes

● DVD players

● Game consoles

● Mobile phone chargers

● Cordless phone adapters

● Broadband modems

● VoIP phones

● Wireless routers


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©2015 Power Integrations | www.power.com

Track Record of Growth

Well-Diversified Revenue Mix

23% Computer

43% Comms

2002 2014

18% Comms

37% Consumer

35% Industrial

10% Computer

Higher-margin industrial & consumer markets now >70% of revenues

24% Consumer

9% Industrial


Strong Cash Generation

0102030405060708090

100

2008 2009 2010 2011 2012 2013 2014

Cash Flow from Operations ($M)

One-time tax payment


Strong Balance Sheet

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35

Q3'08 Q4'09 Q1'11 Q2'12 Q3'13 Q4'14

Diluted Shares Outstanding (M)

At December 31, 2014

$175M cash and investments Used $116M for Concept acquisition,

$23M for CamSemi acquisition

No debt

Quarterly dividend of $0.12/share

Diluted share count down 8% since

2008 on share repurchases

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Q3'08 Q4'09 Q1'11 Q2'12 Q3'13 Q4'14

Cash and Investments ($M)

Power Integrations, Inc. Nasdaq: POWI

powi investor-presentation-2015-02 v001-l1knq4

Investor Relations

power integrations website

integrated power converters

higherpower products

efficient appliances

renewable energy

gaap results

oral presentation

presentation andor